Blockchain’s role in operation strategy of power battery closed-loop supply chain

Abstract

With the rapid development of the electric vehicle industry, the issue of recycling retired power batteries is becoming increasingly prominent. Considering the adoption of blockchain technology to enhance information traceability for retired power batteries, we construct three closed-loop supply chain decision-making models: a supply chain that does not adopt blockchain technology, a manufacturing enterprise that independently bears the input cost of blockchain technology, and a scenario which both manufacturing and selling enterprises jointly bear the blockchain technology input costs. Through the comparative analysis of the equilibrium solutions of these models, including the profits of each supply chain member, consumer surplus, environmental impact, and social welfare, it is concluded that the level of information traceability increases with the increase of the blockchain technology input cost-sharing ratio λ by the selling enterprise. However, there is a threshold for λ and λ cannot be infinitely increased. The profits of both manufacturing and selling enterprises increase with the adoption of blockchain technology, yet the ladder-utilizing enterprise achieves the highest profits when not adopting blockchain technology. Furthermore, the adoption of blockchain technology can increase consumer surplus and social welfare while reducing the impact on the environment. These studies provide theoretical guidance on both economic and social environment for the operation decision of each member in the closed-loop supply chain of power batteries.